Tesla finally posts a profit

Tesla finally posts a profit

Model 3 cars start at about US$50,000, despite a Tesla goal of making an electric vehicle priced for the masses.

Prior to Q3 2018, Tesla has only had two profitable quarters since going public in 2010, and Musk's affirmations of profitability by the end of 2018 had been met with deep scrutiny. It fell far short, making just 793 in the last week and 2,700 for all of 2017.

As recently as June, the consensus was that Tesla would break even or report a small fourth-quarter loss. "Profitability is improving at a rate where the company is on track to generate enough cash to meet its $1.7 billion debt obligations".

Musk said the company's profit didn't come at the expense of other things, such as cutting back on product development.

According to Bloomberg, Ellison defended Musk, citing the accomplishments of Musk's rocket company, SpaceX, which has built rockets created to land on platforms in the ocean.

"When we started the Model 3 production ramp, we were transparent about how hard it would be", the representative continued.

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Company shares hit a record in August but decreased again as Musk was sued by short-sellers and USA regulators for tweeting, and then swiftly postponing, a plan to take the company private. "But the current operating plan is to pay off our debts, not to refinance them but to pay them off, and reduce the debt load and overall leverage of the company".

Tesla, which has never reported an annual profit, had been under particular strain after it ramped up spending for its launch of the Model 3, its newest auto aimed at a wider market.

The company has cooperated in responding to what it called a "voluntary request" for documents from the Department of Justice in September, a Tesla spokesperson said.

The company said it hasn't received any further requests from the agency.

The former employees received subpoenas earlier in the probe, and Federal Bureau of Investigation agents recently have sought to interview a number of them, sources said.

Six months ago, Tesla was struggling to produce 2,000 Model 3 sedans a week while Elon Musk slept on the factory floor.

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The FBI is now comparing the company's statements with its production capability during 2017.

The company earned $311.5 million during the three months ending in September, swinging from a loss of $619 million at the same time past year. Shortening the time cars are in transit so that revenue can hit the books more quickly would shorten its cash conversion cycle, boosting cash flow.

But results posted on Wednesday's showed that Tesla is not in danger of going bankrupt.

Third quarter materially de-stresses Tesla's balance sheet and could support more leverage if the company can demonstrate more than one quarter of healthy free cash flow generation and sustained demand for Model 3.

He continued: "The company's cash balance (less deposits) and working capital have been a concern for investors for the past several quarters".

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